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What are they?
When are they made?
Is the claimant's consent needed?
How much can be deducted?
More information
Benefits are normally paid direct to the person claiming but sometimes money can be deducted by the DWP and paid to a third party. Deductions from benefits are also known as 'direct deductions' and are formally called the 'Third Party Deductions Scheme'. These deductions are usually made from certain means tested benefits including Income Support, Pension Credit, Jobseekers Allowance - income based and Employment and Support Allowance - income related. However in some circumstances they may be made from other benefits. Most deductions are made when there is a debt and if there is enough benefit to cover the payments.
Deductions can only be made in certain circumstances, usually when a person has got into debt. Deductions can include the following:-
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fuel debt - fuel direct payments can be made if a person is in gas or electric debt. The fuel company should not disconnect a person if this happens. The amount deducted will include current fuel consumption as well as for arrears.
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rent arrears - to have deductions made then the person must owe the equivalent of four weeks full rent.
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Council Tax arrears - the local authority must get a liability order from the magistrates court for deductions to be made.
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housing costs - mortgage interest or interest on loans for repairs or improvements is paid direct to the mortgage lender if the lender is a member of the Mortgage Interest Direct Scheme. Other housing costs can also be paid to a third party including payments under a
co-ownership scheme. Residential accommodation charges can be paid under direct deductions as can certain hostel charges.
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water charges debt - this can include debt for water and sewerage. The deduction can be for both debt and current consumption.
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fines - The magistrates court can apply to have not only fines but also costs and compensation orders to be deducted.
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Deductions can be made without the claimant's consent for:
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Council Tax arrears
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Community Charge ("poll tax") arrears
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fines
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current housing costs, including current mortgage interest
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child support payments
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hostel or nursing home charges which are not covered by Housing Benefit
The claimant's consent is required for deductions if they are for:
- rent and housing costs arrears
- fuel costs and arrears and fuel service charges
- water charges and arrears and water service charges
- loan repayments including integration loans
and the total to be deducted is more than:
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for claimants not getting Child Tax Credit, 25% of their applicable amount for Income Support or Jobseekers Allowance - income based or Pension Credit minimum guarantee or Employment and Support Allowance income related
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for claimants getting Child Tax Credit (CTC), 25% of their CTC plus Child Benefit plus applicable amount or PC minimum guarantee but not any housing costs included in those
If the total to be deducted is less than 25% of those figures deductions can be made without the claimant's consent.
Deductions are usually made from a persons Income Support, Pension Credit or Jobseekers Allowance - income based. In some circumstances they can be made from Incapacity Benefit, Employment and Support Allowance, Retirement Pension, Carers Allowance, and Severe Disablement Allowance.
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fuel - A weekly deduction of £3.40 per fuel debt can be made up to a maximum of £6.80. For ongoing costs it will be the estimated amount of current concumption.
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rent arrears - there can be a deduction of £3.40 per week for rent arrears.
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Council Tax arrears - £3.40 weekly can be deducted.
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housing costs - £3.40 can be deducted for each housing debt up to a maximum of £10.20. For ongoing costs the deduction will be the current weekly cost. For ongoing costs for hostel charges it will be the weekly amount as set by the local authority. For ongoing costs for residential accommodation charges it will usually be all but the amount for personal expenses which is currently £22.60.
More information on mortgage interest payment deductions.
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water charges - £3.40 can be deducted weekly. For ongoing costs it will be estimated.
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fines - this will be £5, or a lower amount of £3.40 a week.
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child support payments - The deduction will either be £5 under the new rules or £6.80 under the old rules.
More than one debt
If a person has more that one debt then there is a limit on the amount that can be deducted. There is also an order of priority for deductions:-
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Rent arrears
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Fuel costs
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Water charges
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Council Tax
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Fines
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Eligible loans
More information on debt.
If you want more detailed information on direct deductions then there are two sources of information:-
